Government & Agencies

American labor shortage is a rose with many thorns

7 Mar 2023

The short supply of US workers is starting to look more permanent than temporary. In this Exchange podcast, former White House economist Jason Furman explains how near-record job openings could lift prices, and why unemployment probably needs to rise for inflation to cool off.

China’s new finance watchdog may boost and batter

7 Mar 2023

Beijing is creating a mega regulator that will absorb the banking supervisor and parts of the central bank, just five years after the last rejig. Clipping the wings of the People’s Bank of China may allow more forceful financial stimulus – and tougher crackdowns on bankers.

Amazon expansion collides with contraction

6 Mar 2023

Cities from Newark to Dallas bent over backwards to court the e-commerce giant five years ago. Now it is hitting the pause button on HQ2. The fate of a Virginia compound depends on labor market and work-from-home trends. Even $1 trillion companies are without a crystal ball.

Government stock trades get checked, not balanced

6 Mar 2023

A U.S. lawmaker is introducing a bill that will ban senior executive officials at the White House and other agencies from owning or trading individual stocks. That would take care of one branch of government. The other – the legislative – is harder to solve.

Germany’s electricity headache has an M&A cure

6 Mar 2023

Berlin may spend over 20 bln euros on the local unit of Dutch-owned TenneT. Every country’s power grid needs an overhaul to make it fit for the green transition, but Germany’s need is especially pressing. Still, relatively low debt also makes it easier to take swift action.

Capital Calls: Blacklisting China

3 Mar 2023

Concise views on global finance: Another 28 Chinese firms were blacklisted by the United States, making it harder for them to buy US goods. As security officials warn of TikTok’s massive reach, personal data should count as an American export, too.

Banks’ state shareholders can afford slow selldown

2 Mar 2023

The Belgian and Dutch governments took advantage of a market rally to offload chunks of BNP and ABN. Valuations have risen but are still low relative to lenders’ returns. That means Britain and Germany would be wise to move gradually with their NatWest and Commerzbank holdings.

Overlong arms of law grip chipmakers and Disney

28 Feb 2023

Joe Biden is attaching childcare and profit-sharing strings to $39 bln of U.S. funding for semiconductor companies. Meanwhile, Florida’s governor has taken new power over Magic Kingdom theme parks. The mission creep in both cases sets unpleasant precedents for corporate America.

UK begins long and uncertain road back from Brexit

27 Feb 2023

Rishi Sunak agreed a deal over Northern Ireland trade with the European Union. If the UK leader can get it past his own party, it should improve relations and collaboration. Closer links will need bigger compromises than Sunak can stomach, but his deal is symbolically important.

A post-Erdogan Turkey could come in from the cold

27 Feb 2023

Investors shunned the country as the president let inflation rip. He strained relations with the West by cosying up to Putin and did too little on climate change. An opposition win in coming elections, more likely after the recent earthquake, may change all that, says Hugo Dixon.

Politicians could do better with FTX donations

24 Feb 2023

Recipients of cash from Bernie Madoff and Allen Stanford had to hand it back. In Madoff’s case some $14 billion was recouped. The people overseeing the FTX bankruptcy vow to go after politicians. In a perfect world, lawmakers would voluntarily give money back.

Ukraine’s long shadow on business and geopolitics

23 Feb 2023

It’s been 12 months since Russian President Vladimir Putin’s bloody invasion. In this Viewsroom podcast, Breakingviews columnists discuss how energy markets have changed for good, how defence companies are benefiting, and another potential conflict troubling CEOs and investors.

Capital Calls: World Bank, Bumble, Wood Group

23 Feb 2023

Concise views on global finance: The U.S. picks ex-Mastercard boss Ajay Banga to run the multilateral development bank; while the dating app’s shares are down, private equity owner Blackstone is still in the money; the UK oil services group has turned down three bids from Apollo.

Treasury game of chicken will keep being less fun

21 Feb 2023

Investors in six-month T-bills had been at odds with the Fed’s plans to raise rates. That spread narrowed recently after the market did a U-turn. But investors still collectively think rates will be lower than what the Fed is projecting. Those that stay stubborn will regret it.

Even a weak Russia is a problem for Europe

20 Feb 2023

A year after Vladimir Putin invaded Ukraine, Europe seems destined for an arms race and further economic decoupling from its neighbour. But extra defence spending, lost business and rebuilding costs will be minor compared to a scenario where Moscow crushes Kyiv, says Hugo Dixon.

Brainard exit replots Fed’s interest-rate dots

15 Feb 2023

Vice Chair Lael Brainard is leaving the U.S. central bank for a White House job. Among the Fed governors, she was the most vocal in cautioning against rapid rate hikes. With prices still soaring and unemployment low, Brainard’s exit opens the door to higher borrowing costs.

Maybe U.S. inflation is transitory after all

14 Feb 2023

Prices rose 0.5% in January, a higher month-on-month rate than central bankers would like. Yet temporary events like a nationwide egg shortage were major contributors, and those price hikes are already reversing course. In the fight against high inflation, patience is a virtue.

Economic war with China would be MAD

14 Feb 2023

The prospect of mutually assured destruction averted nuclear conflict during the Cold War. Hopefully, fear of the economic equivalent will stop a showdown with China. But after the shooting down of a Chinese balloon, tensions are rising and errors are possible, says Hugo Dixon.

Bank of Japan’s new governor starts on back foot

14 Feb 2023

Academic Kazuo Ueda will replace Haruhiko Kuroda atop the central bank after the first choice demurred. He’s respected but lacks factional support and faces an unpopular prime minister pushing an expensive agenda. His appointment augurs a rocky transition at a delicate time.

UK bailout has energy bosses walking on eggshells

13 Feb 2023

Power suppliers like Centrica took billions of pounds of government cash to help customers pay high bills. That leaves them open to charges they pocketed gains and handed losses to taxpayers. For an industry intertwined with the state, pay restraint is vital to self-preservation.